Bank of America has reduced its revenue and earnings estimates for the Latin American oil and gas sector, driven by a downward revision in its crude oil price forecast.
The adjustment reflects growing expectations that US-China trade negotiations will stabilize, potentially easing supply constraints and capping price upside in the near term.
44% drop in the index on June 24 as investors rotated out of cyclical names.
Despite the broader sector downgrade, the bank retained its buy recommendation on Petrobras (PRIO3.SA), keeping the Brazilian state-owned major among its top picks in the region.
Analysts highlighted the company’s resilient production profile and cost structure as key differentiators that should shield it from the worst of the price volatility.
The move comes as Brazil’s benchmark Ibovespa index has faced recent selling pressure, with energy and mining stocks leading declines.
Petrobras shares have been particularly sensitive to shifts in global oil sentiment, having contributed to a 0.44% drop in the index on June 24 as investors rotated out of cyclical names.